Insured US SCS losses above $31bn make 2024 a top-4 year already: Bowen, Gallagher Re

Industry insured losses from severe convective storms in the United States have already exceeded $31 billion, which makes 2024 one of the top-4 most costly years for the peril already, according to Steve Bowen, Chief Science Officer at reinsurance broker Gallagher Re.

Bowen, commenting on Linkedin, said of SCS activity in 2024, “It has been a relentless start to the year. This also continues to drive home the point that defining this as a “secondary peril” is off the mark.”

Adding that, “SCS has been, and continues to be, a primary point of focus and loss driver for many national and regional insurance carriers.”

Explaining the costs that Gallagher Re estimates are attributed to severe convective storm losses so far this year, Bowen said the total is running high.

“We have already well exceeded $30 billion in US SCS insured losses in 2024. We have also already exceeded the most recent full year decadal average of $31 billion.

“This is already a Top 4 costliest SCS year on record for the US insurance industry (2023, 2020, 2011, 2024),” Bowen said.

Severe convective storm losses for the insurance and reinsurance industry reached an estimated from $50 billion to $60 billion in 2023, depending on whose figures you look at, so the 2024 toll is still far below, but rising fast.

In the first-quarter of 2024, US SCS insured losses were above $10 billion and accounted for roughly half of global insured catastrophe losses for the period.

Which means that the second-quarter of 2024 has already contributed more than $21 billion to global insured losses from the US convective storm peril.

Bowen stated, “The accelerating rate of US SCS losses in the past 10-15 years should comfortably be understood as a new normal.

“Are we willing to invest to be better prepared and limit damage risk? Or simply be content moving the goal posts as “normal” continues to become more expensive?”

Primary insurers are shouldering much of the burden from these losses, given their reinsurance now attaches higher and aggregate coverage has generally reduced in availability.